Metro project vendors mount pressure to expedite payments

Apart from meeting CM Narendra Modi over the matter, aggrieved association members are also mulling legal course of action

Crying foul over delayed payments by the Metro Link Express for Gandhinagar Ahmedabad Company Ltd (MEGA), several members of the MEGA Vendor Welfare Association (MVWA) are mounting pressure on the company.  MEGA is the nodal agency for executing the metro rail project between Gandhinagar and Ahmedabad.

Apart from planning to approach Gujarat chief minister Narendra Modi, the aggrieved association members are also mulling a legal course of action.  Of the total 44 vendors associated with MEGA, around 30 vendors are members of MVWA.

According to the association, MEGA had distributed purchase orders (PO) worth approx ' 300 crore for the supply of Earth Filling Material, which was to be dumped at MEGA's roughly 700,000 sq mts Test Track Site, at Motera in Gandhinagar.  

"With each of the PO worth ' five crore and in 100,000 tonnes, the order was to be completed in a short span of 90 days, leaving each of the suppliers to arrange for 44 dumpers daily with a capacity of 30 tonnes each to dump material worth over ' 6.66 lakh.  We were required to work continuously for 75 days per 24 hour working day," said Jatin Bhayani, chairman of MVWA. However, after making all advance payments to material suppliers and transporters, the vendors have still not been paid in full by MEGA, the association said.  Of the total PO worth ' 300 crore put out by MEGA, MVWA member vendors submitted a bill of ' 123 crore, out of which only ' 85.22 crore worth payment has been made so far by MEGA, MVWA alleged.  In its other allegations, the association stated that several cheque issued in September 2013 by MEGA bounced. However, when contacted, a senior official MEGA on condition of anonymity said, "This is not true. Not a single cheque issued by MEGA has bounced since September 2013."  The official refused to comment further on the issue. IP Gautam, vice chairman of MEGA and Vijay Nehra, chief executive officer of MEGA could not be contacted.

 

The association also alleged that apart from non-payment of dues, MEGA has also been cancelling purchase orders citing lack of authenticity in the documents. "Moreover, MEGA now wants vendors to get environmental clearance certificate, for continuation of the purchase order, which actually falls in the scope of MEGA. We, on the other hand, are just intermediaries between quarry owners and MEGA the actual users," said Bhayani.

 

MVWA alleged that the nodal agency for the metro project has "verbally" said the site where the vendors are dumping material does not belong to MEGA. 

 

"Hence, if MEGA cannot pay, then how or why did they release cheque earlier.  Also, if the site does not belong to them, then what about the hundreds of crore of rupees worth material being dumped by us and part payments made by MEGA? MEGA also does not answer who is going to compensate for the losses incurred by each and every vendor, for the advances given to the quarry owners and the hired dumpers," he added.  A senior MEGA official declined to comment on the allegations.

 

Meanwhile, core infrastructure works for the metro rail project in Gujarat were likely to begin in fourth quarter of year 2013 and Phase I is scheduled to be completed by August, 2017. The entire project including Phase II will be fully operational in March 2021 at an estimated project cost of Rs 19000 crore.